UPDATE 11/14/12: According to commenter bob, this issue has been settled and was the result of some wayward affiliates of Legacy, not Legacy itself.

Another company gets busted by the feds to the tune of $250,000 for using fake reviews to generate business:

The Learn and Master Guitar program promoted by Legacy Learning and Smith is sold as a way to learn the guitar at home using DVDs and written materials. According to the FTC’s complaint, Legacy Learning advertised using an online affiliate program, through which it recruited “Review Ad” affiliates to promote its courses through endorsements in articles, blog posts, and other online editorial material, with the endorsements appearing close to hyperlinks to Legacy’s website. Affiliates received in exchange for substantial commissions on the sale of each product resulting from referrals. According to the FTC, such endorsements generated more than $5 million in sales of Legacy’s courses.

As fake reviews and pay per post type services have proliferated the government have come to see these tactics as the online equivalent of misleading advertising:

The FTC’s revised guidelines on endorsements and testimonials, issued in 2009, explain in general terms when the agency may find endorsements or testimonials unfair or deceptive. Under the guidelines, a positive review by a person connected to the seller – or someone who receives cash or in-kind payment to review a product or service – should disclose the material connection between the reviewer and the seller of the product or service.

As you may recall, two years ago Lifestyle Lift got busted for posting fake reviews about their amazing procedure for ridding people of Turkey Necks and was forced to pay a $300,000 fine.

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11 Response Comments

  • Ted Paff  March 17, 2011 at 10:33 am

    Its about time.

  • Craig  March 18, 2011 at 12:08 am

    Google places has a bug where you can steal other people reviews from other citation sources.. Woo hoo…

  • Richard Sears  March 21, 2011 at 7:45 pm

    I was just having this talk with a client today who had made 3 fake reviews , from the same IP within the same week.Needless to say we removed them but I explained to him how he could have put at risk months of work.

  • Scott Gaulin  March 23, 2011 at 4:45 pm

    Couldn’t agree more. Reviews are critical to success and faking it is way to easy. Here at whirLocal.com, we built a system for business owners to proactively gather, manage and share real client reviews and testimonials. Hopefully then they won’t be tempted to create/buy fakes

  • Anthony Milano  March 27, 2011 at 11:00 am

    Most reviews on the web are bogus entries. People are just too stupid to recognize it..

  • Ana  March 29, 2011 at 2:04 pm

    think black.

  • Kelly Marsh  March 31, 2011 at 10:43 am

    It seems they made plenty of money to cover those charges. I have seen a ton of review services popping up for Google places listings where they post from different Ips. Not sure if they can actually stop the fake reviews. Also with this new +1 button coming out, It’s going to be even easier to manipulate search results.

  • Curtis  July 26, 2011 at 2:42 pm

    I understand posting fake reviews would be against FTC regs. But let’s just say a car dealer hires a company called Review Boost to collect, post, and promote ONLY positive reviews using bogus Google accounts that do not represent or belong to the customer. And this company also uses those TONS of google accounts to vote “down” as “not helpful” any legitimate negative reviews. Does this not equate to a “paid endorsement” under the FTC rules? I created a blog at http://www.larryhmilleralert.com where there are some screenshots you can see of this behavior I’m talking about.

  • Andrew Shotland  July 26, 2011 at 4:45 pm

    Curtis, I don’t think that example fits the definition of “paid reviews” but it does violate Google’s guidelines. If you report them, eventually they should do something about it.

  • Bill Lumberg  August 9, 2012 at 8:40 pm

    Cheaters never win….

  • bob  November 14, 2012 at 4:19 pm

    This is old news,
    Legacy paid their fine, agreed to change the way they allow “affiliates” web sites advertise.

    Legacy and the Guitar Instructor Steve Krenz are ‘straight’ up people, it was the affiliates that messed things up.

    the LMG programs are great, been following the course since 2007 and have never been happier with my money spent.
    Just buy from the Legacy source, don’t bother looking at the affiliates.